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Trump Tax Cuts - Ultimate Con

Trump tax cuts summarized:

Trump: Give me $100 to give to the rich
You: Are you crazy? I donít have $100 to give to the rich
Trump: Itís OK, just borrow it from your credit card
You: No, I donít want to borrow money just to give it to the rich
Trump: How about if I give you 20 dollars now, then you can borrow $100 dollars to give to the rich, and you can pay it back, with interest, later.
You: OK, sounds good

I hope that everyone understands that any tax cuts that are not accompanied by spending cuts are actually money that you are borrowing that you and your descendants will have to pay back later. Tax cuts are the ultimate political con because politicians are able to use your own money to buy your vote, but you dont have to pay the bill until later.

Re: Trump Tax Cuts - Ultimate Con

Well, first of all it isn't your money they are giving to the rich. They are simply letting the rich keep more of their money.
The congress is spending your money, that is true. But it doesn't mean that the money being taxed is originally "yours".
So your narrative is wrong. The better are more "just" context would be to talk about the percentage of the total U.S. Budget that the rich are ultimately paying.

Like, are they paying 5%... 10%.. 80%? Is that amount just? The way you have framed the debate is fundamentally flawed, because it would still be valid if the rich were paying 100% of all taxes. Which would of course be unjust, and thus your approach is flawed.

Re: Trump Tax Cuts - Ultimate Con

I would also question the assumption that the benefits of these cuts are going disproportionately to the rich. Is there any evidence of that?

In 2015 45%+ paid no income tax at all.

If the bottom half of all "taxpayers" currently pay NO income tax at all, they just can not be given a tax cut virtually by definition.

https://www.marketwatch.com/story/45...tax-2016-02-24
"An estimated 45.3% of American households — roughly 77.5 million — will pay no federal individual income tax, according to data for the 2015 tax year from the Tax Policy Center, a nonpartisan Washington-based research group. (Note that this does not necessarily mean they won’t owe their states income tax.)"

In 1980 the top 1% of earners paid 19.29% of all personal income tax, in 2015 it was 39.04%.
In 1980 the top 25% of earners paid 73.12% of all personal income tax, in 2015 it was 86.62%.

The bottom 75% of wage earners in 1980 paid 26.88% of all personal income tax, in 2015 it was 13.28%.

So in the last 35yrs the top one percent of earners has seen their contribution of total $'s double, while the bottom 75% is contributing half as much of total $'s as they were in the same time period.

Re: Trump Tax Cuts - Ultimate Con

Originally Posted by Belthazor

If the bottom half of all "taxpayers" currently pay NO income tax at all, they just can not be given a tax cut virtually by definition.

No disagreement here, and an excellent point. I would add what prompted my question, that those top earners under the current plan actually see their taxes go up (those above $1M in income in California and New York) due to the cap in state tax credits. Its an odd argument to say this was a "tax cut for the rich" when the very rich saw their taxes go up and literally every other tax payer saw their taxes go down.

"Suffering lies not with inequality, but with dependence." -Voltaire

"Fallacies do not cease to be fallacies because they become fashions.Ē -G.K. Chesterton

Re: Trump Tax Cuts - Ultimate Con

Originally Posted by Squatch347

No disagreement here, and an excellent point. I would add what prompted my question, that those top earners under the current plan actually see their taxes go up (those above $1M in income in California and New York) due to the cap in state tax credits. Its an odd argument to say this was a "tax cut for the rich" when the very rich saw their taxes go up and literally every other tax payer saw their taxes go down.

People who owned businesses say their business profit taxes drop pretty dramatically. Anyone who owns shares in a corporation saw corporate taxes take a nose dive and thus those investments increase in potential future value. Both of these things are a big boon to people who have substantial wealth invested in those areas.

The estate tax rollbacks only affect people with very large estates, aka only benefit the rich. It was also a boon if you have significant overseas bank accounts, not something you see much among the lower or middle class.

Re: Trump Tax Cuts - Ultimate Con

Originally Posted by Sigfried

People who owned businesses say their business profit taxes drop pretty dramatically. Anyone who owns shares in a corporation saw corporate taxes take a nose dive and thus those investments increase in potential future value. Both of these things are a big boon to people who have substantial wealth invested in those areas.

But neither of these groups are predominately made up of "the rich." Certainly the rich are in those groups, but half of all small business owners (IE the sole proprietorship primarily affected here) take home $0/year. For the other half, the average is something like $70k.

Same with stock owners. There are certainly gigantic hedgefunds with the megawealthy that benefited (though given their general portfolios, not as much as you might think), but the majority of stock owners do so through index funds, retirement pension funds, or other conglomerations of relatively small holdings.

I don't think that anyone is arguing that no "wealthy people" received a benefit, but rather that it is disengenous to say that these tax cuts are really "tax cuts for the rich" or even (as the OP put it) a massive transfer payment to the rich. That seems a bit extreme given the data, right?

"Suffering lies not with inequality, but with dependence." -Voltaire

"Fallacies do not cease to be fallacies because they become fashions.Ē -G.K. Chesterton

Re: Trump Tax Cuts - Ultimate Con

Originally Posted by Squatch347

But neither of these groups are predominately made up of "the rich." Certainly the rich are in those groups, but half of all small business owners (IE the sole proprietorship primarily affected here) take home $0/year. For the other half, the average is something like $70k.

Those taking home $0 aren't paying anything in business taxes so generally speaking so they don't enter into the picture. And the statistics you offer are generally for "small business owners" but the tax breaks are for all business owners. Some of the worlds biggest businesses are not coproprations but are privately held businesses. There are private businesses worth more than 100 billion in anunal revenue. So using "small business" is automatically de-selecting the wealthy business owners for the most part. What you want is "private business".

Same with stock owners. There are certainly gigantic hedgefunds with the megawealthy that benefited (though given their general portfolios, not as much as you might think), but the majority of stock owners do so through index funds, retirement pension funds, or other conglomerations of relatively small holdings.

Nope. http://time.com/money/5054009/stock-...rcent-richest/ The top 10% of Americans own 84% of US stock holdings. Yes, lots of middle income people own some stock, but they are bit players compared to the wealthy. Money begets money, that's how capitalism works and it is the rich who do most of the investment and thus reap most of the rewards.

I don't think that anyone is arguing that no "wealthy people" received a benefit, but rather that it is disengenous to say that these tax cuts are really "tax cuts for the rich" or even (as the OP put it) a massive transfer payment to the rich. That seems a bit extreme given the data, right?

No. It largely benefits the wealthy, and it was designed to largely benefit the wealthy. It's being sold as a benefit to everyone, and yes everyone can get a little taste of the lower taxes, but by and large, the rich get the biggest breaks here and because they have the most at stake, far and away the biggest total windfall in straight dollars.

Here's the thing though, taxes will always be largely about the wealthy, both increases and decreases. That's where the money is. A small sliver of the population owns the lions share of capital and collects the lions share of income. When it comes time to pay the governments bills, they will be on the hook for the lions share of that. So they are always the ones with their hands in the meat grinder for bettter or worse.

Re: Trump Tax Cuts - Ultimate Con

Originally Posted by MindTrap028

Well, first of all it isn't your money they are giving to the rich. They are simply letting the rich keep more of their money.
The congress is spending your money, that is true. But it doesn't mean that the money being taxed is originally "yours".

I don't understand what you are trying to say here. Sounds like you are saying that when the rich are taxed it is their money but when I am taxed it is not my money.

Originally Posted by MindTrap028

So your narrative is wrong. The better are more "just" context would be to talk about the percentage of the total U.S. Budget that the rich are ultimately paying.

Like, are they paying 5%... 10%.. 80%? Is that amount just? The way you have framed the debate is fundamentally flawed, because it would still be valid if the rich were paying 100% of all taxes. Which would of course be unjust, and thus your approach is flawed.

OK, I will frame it another way, without mentioning wealth, and perhaps it will clear up part of the argument. I will elaborate on the differences in the tax cuts for wealthy versus non-wealthy in another post.

The average taxpayer is currently paying roughly $2500/year just on interest on the federal debt. Under the new tax plan, that will double in the next five years. To suggest the tax cuts are allowing taxpayers to keep more of their own money is simply not accurate. Without corresponding spending cuts, the tax cuts equate to the government allowing taxpayers to keep more of their money now, while simultaneously borrowing that same amount, with interest, to pay for the spending that the government can't afford to pay for. Put another way, the government is borrowing money on the taxpayers behalf to pay for the tax cuts, which of course the taxpayers will have to pay back later, with interest. I would rather not have a tax cut if it is being put on my credit card. Any politician that uses tax cuts this way is conning taxpayers/voters.

By then, the bottom 75% income earners will get only 4% of the total tax cuts!

In my OP I did not argue that it is unjust, I was attempting to argue that the middle class is getting conned and don't realize it. Many in the middle class are happy about the tax cut because they have a little bit more money in their pocket for now. However, the tax cut represents a large wealth redistribution versus the old tax structure, and it heavily favors the top income earners, at the expense of those with lower incomes.

By then, the bottom 75% income earners will get only 4% of the total tax cuts!

In my OP I did not argue that it is unjust, I was attempting to argue that the middle class is getting conned and don't realize it. Many in the middle class are happy about the tax cut because they have a little bit more money in their pocket for now. However, the tax cut represents a large wealth redistribution versus the old tax structure, and it heavily favors the top income earners, at the expense of those with lower incomes.

Perhaps you missed post #4, but to pick one point from that post:
"If the bottom half of all "taxpayers" currently pay NO income tax at all, they just can not be given a tax cut virtually by definition."

Re: Trump Tax Cuts - Ultimate Con

Originally Posted by Belthazor

Perhaps you missed post #4, but to pick one point from that post:
"If the bottom half of all "taxpayers" currently pay NO income tax at all, they just can not be given a tax cut virtually by definition."

So how could we give a tax cut to people that pay no tax at all?

Originally Posted by Belthazor

Perhaps you missed post #4, but to pick one point from that post:
"If the bottom half of all "taxpayers" currently pay NO income tax at all, they just can not be given a tax cut virtually by definition."

So how could we give a tax cut to people that pay no tax at all?

I did read your post and I think you missed the point of the OP. I was not commenting on the fairness of the tax cuts or the tax code - we could debate that in a separate thread but it is off-topic for this thread. I was responding to the fact that the Republicans have tried to spin the tax cuts as benefitting the middle class, or all taxpayers, when it is really for the wealthy. And many of my friends and acquaintances who are middle class Trump supporters believe the spin.

Your data actually supports my position, or at least does not contradict it. After all, my position is that the middle and lower classes are getting little to nothing out of the tax cuts. One thing about your data on the bottom taxpayers I would like to mention, is that they do pay social security and medicare taxes, even if they don't pay FIT. That is relevant to this discussion because social security and medicare might have to be cut to help pay for the tax cuts to the wealthy. So even those who don't pay FIT could eventually be adversely affected, in an indirect way, by the tax cuts for the wealthy. In addition, there have been no cuts to social security and medicare taxes, which would be a way for those who don't pay FIT to get a tax reduction.

Re: Trump Tax Cuts - Ultimate Con

Originally Posted by Boris

I did read your post and I think you missed the point of the OP. I was not commenting on the fairness of the tax cuts or the tax code - we could debate that in a separate thread but it is off-topic for this thread. I was responding to the fact that the Republicans have tried to spin the tax cuts as benefitting the middle class, or all taxpayers, when it is really for the wealthy. And many of my friends and acquaintances who are middle class Trump supporters believe the spin.

I was responding to the fact that the Republicans have tried to spin the tax cuts as benefitting the middle class, or all taxpayers, when it is really for the wealthy. And many of my friends and acquaintances who are middle class Trump supporters believe the spin.

Yes, everyone spins their own story. Partly why one man/one vote doesn't work. People have to pay attention and try to overlook their own biases.
You haven't really said what you believe "middle class" is but, from Forbes:

"Income $46,800 - $86,100
How many get a tax cut? 75.1% of taxpayers earning between $46,800 and $86,100 will get a tax cut.
How much, on average, will those getting a tax cut save? On average, those enjoying a tax cut will save $1,320.

Income $86,100 - $149,400
How many get a tax cut? 77.8% of taxpayers earning between $86,100 and $149,400 will get a tax cut.
How much, on average, will those getting a tax cut save? On average, those enjoying a tax cut will save $2,640"

So of those earning roughly $50,000-150,000, more than 75% will see a tax cut.

One thing about your data on the bottom taxpayers I would like to mention, is that they do pay social security and medicare taxes, even if they don't pay FIT. That is relevant to this discussion because social security and medicare might have to be cut to help pay for the tax cuts to the wealthy.

Can you support the claim the SS cuts will result from an income tax cut???

And this is for those same people's health care and retirement, not the general budget.

What you are missing about taxes is, a tax cut means somebody gets to keep more of their OWN money. It isn't giving away money out of the treasury. This country has a spending problem and have relied on growth to the economy and money stolen,...I mean barrowed from social Security to keep it going!!
Do you realize the American public holds most of our Govt's debt?
Both parties got us into this mess TOGETHER. They both suck and the answer is not more taxes.

In addition, there have been no cuts to social security and medicare taxes, which would be a way for those who don't pay FIT to get a tax reduction.

Though true, both of these programs are suffering a major lack of funds already.

Another possibility would be do away with income tax completely. Replace it with a consumption tax. When someone buys anything, they pay a tax. Food could be exempted for instance, so the poor would pay very little in such a situation.

I hope that everyone understands that any tax cuts that are not accompanied by spending cuts are actually money that you are borrowing that you and your descendants will have to pay back later. Tax cuts are the ultimate political con because politicians are able to use your own money to buy your vote, but you dont have to pay the bill until later.

We are already barrowing $0.43 for every Fed dollar spent.

But more to your point of tax cuts ALWAYS results in barrowing, also from Forbes using data from 1911-2011: